If you are planning to make a tax-deductible contribution before year-end, you'd better act fast - especially if you're going to donate stock or other securities. They can take days or weeks to transfer.

If you're not sure which charities should get the money, a donor-advised fund might be the answer.

Donor-advised funds are like private foundations for the little guy. Most are sponsored by community foundations or by charitable organizations affiliated with brokerage firms. Some banks, universities and religious organizations also sponsor them.

For as little as $5,000 to $25,000, you can set up a fund and donate cash, securities or in some cases other assets. As long as you make the contribution before year-end, you can take the tax deduction for 2007, assuming you itemize.

Later, when you have decided how to allocate the money to charity, you ask the fund's sponsor to send checks from your account to the nonprofit organizations.

In the meantime, the money is invested. Most sponsors let donors choose from a limited number of funds, sort of like a 401(k) plan. The earnings accumulate in your fund and can be donated to charity, but you don't get a tax deduction for growth in the account.

Once you put money in the fund, you can never get it back. "You don't get a deduction unless you relinquish control," says Kimberly Wright-Violich, president of Schwab Charitable, the nation's second-largest sponsor of donor-advised funds (after Fidelity Charitable Gift Fund).

Although you can recommend how the money should be distributed, it's legally the sponsor's decision. The sponsor must make sure the charity is a real organization, is qualified to accept tax-deductible contributions and is not sponsoring terrorist activities. You cannot get any direct benefit from the contribution, such as free tuition for your children. If the donation passes these tests, the sponsor almost always gives to the charity of your choice.

The money can sit it your fund as long as you want. At death, you usually have a variety of options, such as naming your children as successor advisers or turning it all over to charity.

That angers some critics, who say the money should go where it's needed now, not languish in investment accounts. Some say donor-advised funds should be forced to give away at least 5 percent of their assets each year, the same requirement that applies to private foundations.

The big national sponsors say their donors, in the aggregate, distribute about 20 to 30 percent of their assets per year.

Community foundations have been offering donor-advised funds for decades, but they were little known until firms like Fidelity Investments, Charles Schwab and Vanguard Group started promoting them in the 1990s. These companies set up separate charitable subsidiaries to take the tax-exempt donations, but they recruit donors from their customer bases. They profit by keeping the money in their own funds, on which they earn investment management fees.

"Financial institutions are interested in assets under management. Rather than seeing individuals who have philanthropic capabilities take assets out of their organizations, they offered a way to do (philanthropy) through them," says Sandra Hernandez, chief executive of the San Francisco Foundation, which has offered donor-advised funds for at least 30 years.

Wright-Violich says community foundations have benefited from all the marketing companies like Schwab have done. That marketing has been very effective.

Assets in the largest donor-advised funds grew more than 21 percent last year to $19.2 billion, according to the Chronicle of Philanthropy. Their distributions totaled $3.5 billion, up 27 percent from the previous year.

The community foundations cater to people who want to direct at least some of their donations to organizations in their areas and need help deciding which ones are doing the best jobs. The foundations make recommendations after doing a lot of homework on local nonprofits and often give donors a chance to volunteer.

The national sponsors appeal more to people who want to do their own research and make their own decisions. They give donors access to databases and other tools for evaluating charities, such as GuideStar, but they don't make recommendations.

Community foundations sometimes favor charities that match their political or ethical viewpoints, she says.

Sara Ying Rounsaville, a spokeswoman for the San Francisco Foundation, says that if a donor wants to direct funds to a charity that is "completely inconsistent with the foundation's values, mission and goals," its chief executive will discuss it with them. She said the foundation once turned down a donor's requested contribution to an organization "that had a policy around gays and lesbians that was inconsistent with our values."

If they don't choose a community foundation, many people open a donor-advised fund with a company where they already have an account. That usually makes transferring cash or assets to the fund quicker and easier.

The best way to donate money is to transfer appreciated securities - such as stock or mutual funds - that you have held for more than one year. If you transfer title to the charity (or your donor advised fund) before year-end, you will get a deduction for the current market value of the security and you won't pay capital gains tax on the appreciation.

It's usually a bad idea to donate securities in which you have a short-term gain or a loss.

If you donate securities you have held for one year or less, you will owe ordinary income tax on the appreciation, and your charitable deduction will be the current market value or your cost, whichever is less.

If you have a loss, it's usually better to sell the securities first so you can take advantage of the tax loss, then donate cash to charity.

If you plan to donate appreciated securities before year-end, act now because it can take days or weeks - depending on the broker - to transfer securities out of your account.

As always, it's good to check with a tax adviser if the sums are meaningful.

Note that charitable deductions are limited to 50 percent of your adjusted gross income per year if the gift is in cash, and 30 percent if it is in securities.

Deduct now, distribute later

Donor-advised funds let you make a tax-deductible contribution now and decide which charities should get the money later. Here are key stats for selected donor-advised funds.

Sponsor

Assets in donor-advised funds{+1}

Minimum

to open

Annual

administrative fee{+2}

Annual investment fee{+3}

Investment options{+4}

Fidelity

$4,700

$5,000

0.6%

($100 minimum)

0.07-1.1%

13 Fidelity and non-Fidelity funds

Charles Schwab

1,900

5,000

0.6%

($100 minimum)

0.10-0.90%

8 Schwab funds

Vanguard

1,790

25,000

0.57%

0.16-0.26%

8 Vanguard funds

Silicon Valley

Community Foundation

895

10,000

1%

($250 minimum)

0.0 to 0.79%

6 funds managed

by external money managers

San Francisco

Foundation

330

10,000

1%

0.14 to 0.55%

3 funds managed

externally

{+1}In millions

{+2}Maximum annual fee, as a percentage of assets. Most sponsors discount fees for larger funds

{+3}As a percentage of assets

{+4}Some sponsors offer additional options for very large funds or let them choose their own investment manager, with the sponsor's approval